Our Farmland Investor Cheat Sheet

Find financial opportunities with expanding firms

Investors have always owned a small piece of the farmland pie. Yet they’re prepared to take on a modestly bigger slice in 2017 as producers free up working capital by selling some of their property.

In other cases, investment firms will pick up land that’s simply on the market and located next to producers interested in farming it. Farmers who want to work with investment companies should do their homework and know what it takes to form a strong partnership.

“The biggest thing is, are they showing above-average yield for the product they are raising?” explains Brian Wise, director of acquisitions for US Agriculture. “We may find out who they buy seed from, who they work with on their fertilizer and chemical inputs, and get their impression [of the producer].”

For farmers who have never partnered with investors, the current economic slump might present the right opportunity, adds Shonda Warner, founder of investment firm Chess Ag Full Harvest Partners.

“We think the world will be a challenging place for the next two to five years,” Warner says. “Our current investment approach is to be extremely fiscally conservative and pencil-sharpening. Agriculture is a cyclic business, and this is one of those times where we hope our conservative ways allows us to ride out the storm with our tenants.

“There are many things both landowners and tenants can do to improve their lands which don’t cost a fortune. We are tending to concentrate on those things right now and are working to help our tenants to survive this cycle. If we do a good job, it will benefit all of us.”

Top Producer asked five firms to share how their portfolios are structured and what they expect of farmers they hire. Collectively, the responses showcase the core factors producers should know as they consider working with investors.